Samurai Investing: Find Your Cashflow Fief
As a Samurai Investor, your primary goal is to obtain ownership of your first fief. A fief is a money-producing asset based on a human need. Food, shelter, and supply chain assets are the most common form of modern-day fiefs.
Investors with fiefs will benefit from a captive audience in that people will inevitably HAVE to do business with you. There is simply no way around it. And that is precisely why Samurai Investors are among the wealthiest of the six financial warrior classes of Invest Like a Warrior.
Japan is a tiny country when compared to other Asian countries. The entire landmass of Japan is only 145,937 mi² spaced over 7000 islands. Consequently, fiefs in Japan were far more valuable than they were in other countries. As a result, vicious wars were fought over control of these fiefs. In response to all of the warfare, a specialized warrior class known as Samurai emerged.
The word Samurai means “to serve.” Thus, it was the job of a Samurai to serve society by protecting its money-producing assets from a hostile takeover. Rice fields, fishing villages, mines, ports, and forests were examples of fiefs that Samurai managed and protected.
In return for their service, every Samurai would be granted their own personal fief. For example, a low-ranking Samurai might be given an oil cart on the side of a busy road, where oil would be sold to travelers. This small yet stable source of income would allow a samurai to take care of his family while he was away at war, and sustain his family in his death.
As Samurai moved through the ranks, their fiefs grew in size. For example, a high-ranking Samurai might be granted an entire rice farm, complete with servants, forever bound to serve the samurai for generations to come. And while a rice farm would have made a Samurai family very rich, owning a rice farm came with many responsibilities.
It was the job of the Samurai to protect the farmers from bandits and, more importantly, other Samurai clans. It was also the job of the samurai to ensure the rice was collected and distributed among his providences. And should a samurai fail in his duties, his fief could be taken away and given to another power-hungry Samurai.
Modern Day Examples of Fiefs
In the modern era, fiefs are anything type of physical investment that fulfills a human need. Most fiefs are no longer earned through the killing of your adversaries. Instead, they are purchased with cash or credit. Here are some excellent examples of modern-day fiefs.
Food Fiefs
Vending Machines
According to the National Automatic Merchandising Association (NAMA), there were 5 million vending machines in the U.S. in 2015. These 5 million vending machines produce an average of $20 billion in sales each year. In addition, vending Machines placed in high-frequency locations such as collision centers and universities can yield hundreds of dollars a week.
Food Carts
Food carts are all about location. A food truck parked outside a significant business district or placed inside a soccer stadium can warrant thousands of dollars of profit a week According to Profitable Venture, food trucks in excellent locations can make upwards of $20,000 — $50,000 a month. With relatively low start-up costs, a food truck could be an ideal first fief.
Franchise Chain Restaurants
Franchises have many advantages over traditional restaurants in that they have built-in customer bases, receive more financial backing from brands, and benefit from existing brand equity. Rap Mogul Rick Ross is well known for being heavily invested in Wingstop, a Southern Chicken Wing franchise.
Real Estate Fiefs
Real Estate is considered by many to be the greatest form of investing. Because people always need a place to live, real estate rarely loses its value over time, especially in the post covid world, where single-family real estate prices are hitting all-time highs.
Single Family Real Estate
It’s been said that America is turning into a nation of renters. And with housing prices where they are, this trend is only expected to continue. That is why single-family homes are such valuable fiefs. Families will always need places to live, and single-family homes offer amenities that apartments just can’t.
Multi-Family Real Estate
Homes designed for multiple families, such as duplexes, represent multi-family real estate. Frat & Sorority houses also fall under this category. These homes offer multiple sources of income and are almost always in high demand. Many Samurai investors get their start in real estate by purchasing a duplex, living in one half, and renting out the other.
Air B&B’s
While most Air B&B’s tend to be vacation rentals, many of them converted their homes into full-time businesses. For example, a controversial model is purchasing a home near a medical center and renting exclusively to families in town for medical procedures. While some may see this as a moral hazard, the owners of these homes view themselves as providing society a much-needed service.
Transportation Industry Fiefs
Despite the rapid rise in work from home, millions of people still need to drive to work. But, with the right business model, you could own a fief of one of the largest industries in the world.
Owning a Gas Station
Gas stations are one of those business models where real estate is often more valuable than the business itself. Owning a gas station is one thing, but owning a gas station in the middle of a center is something else. However, obtain a gas station in a good location, and you can make easy money for years. So long as you’re willing to put up with staffing issues, government red tape, and crazy customer headaches.
Automotive Shops & Services
While the industry is currently going through a dramatic shift to electrification, there will still be a need to service these vehicles. A cash flow asset in this space could be a tire shop, a collision center, car dealership.
Parking Lots
Owning a parking lot, in the right location, is one of the best real estate investments you can make. You’ll get to enjoy daily customers and have virtually no overhead costs. There is nothing to maintain, the staff is easy to come by, and zoning issues are nonexistent. You will also have the ability to charge premium rates on special days such as sports events and concerts.
Supply Chain Industry Fiefs
Fleet Business — Semi trucks & Semi Services
With the pandemic-driven rise in E-commerce, the ownership of the means of shipping is more valuable than ever. Owning a semi-truck, or a business that services semi-trucks, is a sure-fire way to guarantee cash flow, regardless of economic conditions.
Warehouse Ownership
Virtually every single product you’ve ever owned existed in a warehouse at one point. Warehouses provide a much-needed service at the heart of every country’s economy. That is precisely why companies like Amazon are buying up every warehouse they can find. Because if one owns a warehouse, they can expect to see a profit off every single item that comes through its doors.
Land Fiefs
Leasing Vacant Land
Power companies & Cell phone providers are especially interested in leasing vacant land. Cell phone companies pay upwards of $5,000 per month just for the right to park a tower on your land for an extended period. In contrast, power companies’ rates will be $500 to $2,000 per acre per year for solar panels.
Holding Vacant Land
Buy and hold is the basic idea behind this strategy. You simply purchase a piece of land in the desired location and wait until the right buyer comes along. Holding can be a short-term strategy, where you plan on “flipping” the land to a developer a few years after you purchase it, or a long-term strategy of waiting ten plus years for a major development to start.
High-Risk Fiefs
Not all fiefs are created equal. Some fiefs have virtually guaranteed success; many carry significant risks. Below is a list of risky fiefs that are unsuitable for the Samurai Investor.
Restaurants
The restaurant industry is currently in a state of upheaval. The restaurant industry is seeing the highest employee wage growth in decades, food costs are rising, and inflation is starting to bite consumers worldwide. These factors, coupled with the rise of Ghost Kitchens and similar business models, the restaurant model is just too risky to be considered a stable money-producing fief.
Commercial Real Estate
Commercial Real Estate is an industry in major flux. On one end, remote work has caused a mass exodus of businesses from the space. But at the same time, this vacancy has opened new opportunities in markets across the world. The right business model, in the location, commercial real estate could be an epic win. That being said, the risk is significant, and there are much more stable fiefs available to pursue.
E-REITS and Fractional Real Estate
A Samurai only deals in absolutes. Either you own a fief, or you don’t. A Samurai is far too prideful to share an asset with other people. A Samurai would much rather fully own a food cart than own 1/100th of a downtown condominium in New York City. Furthermore, fractional ownership means fractional rewards.
Luxury Fief’s
High-end golf courses, race tracks, yacht clubs, casinos are all examples of luxury fiefs. These fiefs can be highly profitable and open the doors to endless opportunities such as networking with powerful lords, opportunities to pitch venture capitalists, and hear excellent insider information on your enemies. However, luxury fiefs fall under the Financial Shogun Warrior Class, a Prestige Class for the Samurai Investor. Therefore, only the wealthiest Samurai should invest in these types of luxury services.
No matter which direction you choose, remember these key points:
- With great money-making power comes great responsibility.
Fiefs’ can be extremely profitable. However, all fiefs come with very real responsibilities. For example, if you’re serving food, you are personally accountable for your customers’ food safety. If you are a landlord, you do have an obligation to provide a safe building for your rentees to occupy. Take these responsibilities seriously, or a fief can quickly turn into a financial burden
2. Fiefs are a long game, which can take years to see a payoff.
Unlike most other asset classes, competition over fiefs can be much more extreme. By comparison, there’s virtually no competition in trying to purchase stock or cryptocurrency. At the same time, it may take you several years to win your first fief.
3. Be wary of Leveraged Debt
No matter the business model of your fief, there will always be an underlying physical asset. (land, buildings, homes, machines, trucks, etc.) As a result, lenders will always look favorably on those with fiefs. They will almost always be able to under-write extension of credit, which can, in turn, fund the acquisition of more fiefs. Use this power with extreme caution. One only needs to look at the Covid-19 Eviction moratorium and see how many over-leveraged landlords have been forced to sell their properties.
